On subsidized Stafford Loans, the federal government pays the interest
while the student is still in school. On unsubsidized Stafford Loans,
however, the student is responsible for the interest while he or she
is still in school.

Students may, if they wish, defer paying the interest by capitalizing
it, which adds it to the principal of the loan, thereby increasing the
size of the loan. This Cost of Interest Capitalization Calculator
computes an estimate of the accrued interest and the new loan balance at
the end of the deferment period. It also presents the impact of
capitalization on the total amount paid over the lifetime
of the loan.